Social Media ROI: Objectives, Metrics and ‘Clean Carpets’

As with any marketing initiative, a key element that needs to be given thought before embarking on social media is “what will this do for my business?” and “what will the return be on my investment?” There have been numerous blogs written on how to monetise your social media presence and how to show a true bottom-line impact with the activity you post on social media, but is this missing the point? It’s true that marketers still find it challenging to measure ROI on social expenditure but that doesn’t mean it’s impossible. ROI is always possible but the parameters in which you measure a return are sometimes impractical.

For example, how do you measure the ROI on a social media-based customer service function? Similarly, if the activity is based around brand perception and awareness, is a financial target an appropriate goal to head for? Of course, what you could do is set a baseline financial figure and monitor the gain after a certain period, but this would only provide a correlation in activity versus causation. It’s all a bit speculative in my opinion. What I like to see is actual growth and quantifiable results associated with any marketing campaign. I imagine you’re no different.

So with this in mind, how do you measure ROI for social media in a way that proves, in cold, hard facts, that what you are undertaking is actually helping your business?

Define your ROI from the offset

I’ve been referring to ROI in terms of financial targets so far but clearly, this is something that many marketers struggle to prove. Instant financial gain isn’t impossible on social media but is it the best way of measuring whether something is worth doing or not? Firstly, you need to go back to basics and ask “why are we as a business using social media?” Once you set clear objectives for what you want your social media activity to achieve you can start to define goals and, in turn, the ROI.

According to recent Forrester research, there are three key ROI factors to consider:

Brand – has your brand awareness and perception improved?

Risk management – is your business better equipped at managing its online reputation?

Financial – yes, while I’m moving away from this model in this blog, it’s still an important factor to consider in terms of marketing ROI as a whole.

Once you define your targets you can start to see the effectiveness of a campaign.

Select the metrics to support the objectives

During the course of a social media campaign there will be initiatives that work well and those that don’t. In terms of ROI, being able to measure the results of a campaign is vital. For example, if your campaign target is to increase brand awareness, you need to be able to measure the month-on-month interaction level and social reach. ROI is all about defining tangible goals and the metrics to support them.

For example, if you buy a vacuum cleaner from a shop, your ROI is clean carpets. You wouldn’t purchase it to increase the resale value of your house. The same analogy should be applied to social media adoption. If your objective is to increase your overall brand awareness via social channels, the ROI is achieving the metrics supporting that, be it increased social reach, a higher level of unique engagements or an increased level of traffic from social sources to your website – not necessarily growth in immediate sales.

Looking deeper into the type of metrics that can be measured to support a brand awareness objective for a product, we would consider the following:

• Product/brand mentions, comments, shares and other post interaction
• Social reach/impressions
• Referral traffic from social sources
• Fan/follower acquisition

If you can set targets in association with each of these you are well on the way to proving the effectiveness of a social campaign and, therefore, the ROI.

  This article originally appeared on Red Rocket Media and has been republished with permission.
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Author: Connor Brooke

Connor is a Scottish financial expert, specialising in wealth management and equity investing. Based in Glasgow, Connor writes full-time for a wide selection of financial websites, whilst also providing startup consulting to small businesses. Holding a Bachelor’s degree in Finance, and a Master’s degree in Investment Fund Management, Connor has

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